Many Norwegians are unwilling to sacrifice on traditional quality and performance attributes in order to have a greener product, according to BI Norwegian Business School' Master of Science study.
RESEARCH @BI: Green business
Norway is frequently cited as one of the most environmentally concerned nations, and is ranked 5th out of 163 countries on the Environmental Performance Indicator scale.
The results of a recent Master of Science thesis show, however, that many Norwegians are unwilling to sacrifice on traditional quality and performance attributes in order to have a greener product.
Norwegian Green Leadership?
The contradiction between a stated desire for a cleaner sustainable environment and higher levels of emission producing consumption has been called the Value-Action gap. Surprisingly little empirical research, however, has addressed the relative importance of green attributes in purchase situations.
Such green attributes can make choosing green difficult because they frequently force consumers to make tradeoffs on other important “conventional” attributes such as performance, reliability, convenience, and price.
The purpose of a recent MSc Thesis by Erik Farstad and Damir Ljubuncic under the supervision of Professor Erik Olson was to examine the relative importance of green attributes when they are negatively correlated with other important attributes on two major environment impacting product categories:
- Consumer electronics.
Green attributes are often negatively correlated with other conventional attributes and thus create difficult decision environments for consumers wishing to be green, because in such cases it is impossible for them to “have it all”.
Cars for example, typically achieve higher fuel efficiency and lower emissions at the expense of other attributes such as performance (high fuel economy engines usually have lower power ratings and are thus slower), and price (higher for fuel saving technologies such as diesels and hybrids).
Explaining Purchase Intentions
The online survey of 135 Norwegians employed a full-profile conjoint analysis design to determine the importance of negatively correlated green attributes related to energy use and energy saving technologies compared with non-green attributes of a new car or television.
Respondents were shown 9 different TVs or cars and asked to evaluate each on two measures: 1) a 7-point purchase intention scale, and 2) an open-ended “amount they would expect to pay”.
Overall, the TV results show that the most important attributes in explaining purchase intentions are screen technology and screen size.
For cars the most important attribute in explaining purchase intentions is safety, while the least important is engine technology. For both products, the energy use attribute accounts for less than 25% of the total purchase intention variance.
With expected price as the dependent variable, the TV data indicates that low energy use is worth only about 1/30th the financial value placed on screen size where the preference was clearly for larger sizes that will consume more electricity.
For cars, the least green product characteristics (i.e. fastest and safest cars) are the two most financially valued attributes.
What Does This Mean for Marketers?
Previous research has established that even though most consumers say they are interested in green products, they often do not follow through with a purchase.
These results suggest that marketers are unlikely to be successful in promoting consumer preference for green products if choosing green requires tradeoffs with other important attributes.
This article is published in BI Marketing Magazine 2011. The article is a summary of a 2009 MSc thesis titled “Investigating the Relative Importance of Green Attributes: A Conjoint Analysis of High Technology Consumer Durables”. The three authors are the faculty advisor who initiated the project idea and the MSc thesis students who carried it out.
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Text: Professor Erik L. Olson, BI Norwegian Business School, and Graduates Erik Farstad and Damir Ljubuncic, MSc in Marketing, BI Norwegian Business School.